Gambling lobbyists are staging a summer charm offensive designed to stop ministers from raising taxes on the sector, the Guardian has learned, including meeting with Treasury insiders and hosting a darts evening with Labour special advisers and MPs’ staff.
The Treasury is considering whether to simplify the various rates of duty applied to gambling products, a measure that the £11.5bn-a-year sector fears would increase its overall tax bill.
The Betting & Gaming Council (BGC), whose members include high street bookmakers and online casinos, is understood to have outlined its objections in a submission to the Treasury, based on a report written for the trade body by the accounting firm EY.
But the BGC has also embarked on a back-channel lobbying push, according to emails sent to its members and seen by the Guardian. In at least one case, a social event was promoted to Labour staff directly by the Labour Staff Network (LSN), offering them the opportunity to attend and hear speeches.
The event was a darts-themed evening, hosted by BGC and Flutter plc, the owner of Paddy Power, Betfair and SkyBet, an event the trade body said would help it “continue building constructive engagement across Westminster”.
At the event, more than 100 Labour staff and ministerial special advisers heard an address from the BGC chief executive Grainne Hurst, a former Ladbrokes executive and one-time aide to the former Conservative MP Philip Davies, who has railed against tax increases.
The social at the end of June was promoted via the LSN, which is run by and for the staff of Labour MPs and is independent of party HQ. It was held in partnership with Prostate Cancer UK.
A Flutter UKI spokesperson said: “The Labour staffers event was a great opportunity for us to talk about our ‘Big 180’ partnership with Prostate Cancer UK – built around the World Darts Championship – which has so far encouraged 350,000 men to check out their risk of developing the disease.”
As part of the charm offensive, the BGC’s chair, the former Labour MP Michael Dugher, met Katie Martin, the chief of staff to Rachel Reeves, and was also “in touch” with the chancellor herself, according to the emails. A source close to Reeves said she had no formal meeting with the BGC and would not ever have discussed the tax changes.
Senior BGC figures also told members in emails that they had briefed Labour MPs including Jo Platt, Gareth Snell and Adam Jogee on tax, as well as meeting the sports minister Stephanie Peacock – who is Dugher’s successor in his former Barnsley East seat.
The emails said Dugher also met the special adviser to the government’s chief whip, shortly after the bruising defeat on the welfare reform bill. They say BGC representatives attended a campaign fundraiser event for Labour’s business champion Gregor Poynton MP and Imogen Walker, the parliamentary private secretary to Reeves, attended by the prime minister’s chief of staff Morgan McSweeney, who is Walker’s husband, and the UK’s ambassador to the US, Peter Mandelson.
The BCG also hosted events for the Tories, sponsoring the inaugural Conservatives in Sports drinks reception, addressed by the shadow culture minister, Stuart Andrew, and attended by the shadow gambling minister, Louie French, and the chair of the DCMS select committee, Caroline Dinenage.
A BGC spokesperson said: “It is entirely common and appropriate for trade bodies like the BGC to routinely meet with ministers, shadow ministers and MPs as well as officials and advisers across government. All donations and hospitality are consistent with the parliamentary and other rules and are fully declared and transparent.
“Ministers have been clear in public and in parliament that they would be meeting with the relevant stakeholders as part of the consultation on tax harmonisation proposals. That includes the BGC, which represents companies employing over 100,000 people and a sector enjoyed safely by millions of customers each month.
“The BGC also recently met with the minister leading the tax consultation, James Murray, as would be expected as part of any government consultation on measures which would impact businesses and customers.”
It comes as the Treasury considers raising tax on the sector to help Reeves shore up the UK’s ailing public finances. The industry took £15.6bn from British punters last year, of which £11.5bn went to betting and gaming organisations and the remainder to the national lottery and other lotteries.
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A number of Labour MPs are pushing to toughen up the government’s approach to gambling – despite longstanding links of party veterans to the industry. Those who have joined the all-party parliamentary group on gambling include new MPs Beccy Cooper, Sarah Coombes, Alex Ballinger and Andrew Pakes.
The MP Dawn Butler, who intends to run for mayor of London, and the mayor of Greater Manchester, Andy Burnham, have also been pushing to hand more power to councils to block the spread of 24-hour slot machine venues.
Butler launched a campaign on Wednesday to stop the spread of high street betting shops, saying her own borough of Brent in north-west London had at least 102 venues, including betting shops, casinos, and adult gaming centres.
“Nearly one person a day dies by suicide linked to gambling addiction. This is a public health crisis, and it’s time our planning laws reflect that and stop these gambling companies preying on communities that are often vulnerable and deprived,” she said.
Butler has submitted a parliamentary motion, calling for legislative changes to the Gambling Act 2005 to give local authorities greater power to refuse new gambling premises where there is clear evidence of community harm – especially as these venues are being targeted in areas of deprivation.
Gambling companies are projected to pay £3.6bn in duties this year, of which £1.2bn is “remote gaming duty”, a tax of 21% applied to online gambling.
A further £713m is “general betting duty” paid by high street bookmakers at a lower rate of 15%. One option under consideration is to harmonise the two rates.
This has met vehement opposition from the horse-racing industry, which fears the impact on a sport whose finances are already under severe pressure. Senior figures from racing have made this case personally in a meeting with Reeves, according to one industry source.
Some in racing are understood to have made clear they would not object to much higher taxes on online casino products, as long as the sport is left untouched. Several gambling industry sources said this could result in taxes on online gaming products, such as casino games and digital slot machines, being raised from 21% to as much as 35%.
The Social Market Foundation (SMF) thinktank is preparing a report on how much could be raised by adjusting gambling taxes, putting forward several scenarios. At last year’s budget, the Treasury considered but ultimately rejected a proposal from the SMF that would have doubled taxes on the most harmful gambling products to 41%.